Don’t Forget About Your Subsidiary Rights! (Part 1)

Remember that old Dire Straits song, “Money for Nothing”? That’s the point of today’s post…although no chicks for free.

That’s right — I’m talking about subsidiary rights! You’ve already made your sale and done the work in writing, revising, and editing the book, so subsidiary rights are a way to leverage your manuscript to earn essentially free money.

Often referred to as a subright, it’s the right to use content that is subsidiary to the primary right. For example, large print rights or foreign translation rights to a book are subsidiary to the main right of print publishing. This is related to a derivative work right, which is the right to alter content, take extracts from it, combine it with another work, translate it into another language, or otherwise create a new work from an existing piece of content. A derivative work takes copyrighted material and transforms it into something else (such as a film, an audiobook, etc) based on the underlying work. The relationship between these different types of rights is like one of those Venn diagrams we used to draw in elementary school. All derivative works rights are subsidiary rights, but not all subsidiary rights are derivative works rights.

When you make a sale, your contract will spell out certain grants of rights to the work covered by your copyright. When you sign a book contract with a US-based publisher, you grant to your publisher the exclusive right to publish and distribute an English-language version of the work in the United States, its territories, the Phillipines, and Canada.

You also grant your publisher the non-exclusive right to distribute his edition in the open market, included in which is the right to license other versions or editions in English, such as book club rights, large print rights, anthology, second serial, selections, and abridgements.

There’s also a second layer of subsidiary rights, referred to as secondary rights or ancillary rights, that either your agent will reserve for you you’ll grant to your publisher for them to exploit for you. These include first-serial rights (publication in a magazine or newspaper before the book is published), British Commonwealth rights, foreign translation rights, and performance rights. Whether you reserve these rights or grant them to your publisher will depend on the strength of your agent’s negotiating position, the size of the advance offered, or whether or not either party has any intention (or ability) to exploit these rights for you.

If your publisher reserves rights, then you will not receive separate additional advances for the exploitation of each of these rights. The royalties from sales of these derivative works will be part of the initial advance and/or the royalties you are paid out by the publisher. If you sell to an advance-paying publisher, then the royalties from these subsidiary works will be combined with the royalties from your English language North American book sales to determine whether you’ve earned out your advance and are entitled to receive royalty payments beyond the advance. If you reserved the rights, then your advance and royalties from your publisher will have nothing to do with the subsidiary rights. Instead, you’ll receive royalties or an advance from the publisher (or other company) who you sell the particular right to. But either way it amounts to the same thing…money for nothing.

Let’s take a look at just a few of these rights, shall we?

British Commonwealth rights — As I indicated earlier, when you sell to a North American publisher, the grant is limited to English editions in the US, its territories, Canada, and Philippines. This means that you can also sell the rights to a UK publisher.

For example, St. Martin’s Press publishes Darynda Jones in the US, but Piatkus (a Little, Brown imprint) publishes her in the UK. As you can see, even the covers are different, although both are great.

(US edition) (UK edition)

Some publishers, such as Harlequin, reserve Commonwealth rights. For example, Liz Talley‘s A Little Texas is published by Harlequin Superromance (with the identical cover) in both the US and the UK. However, the Kindle edition (with a generic pink cover) is published in the UK by Mills & Boon Cherish, which is part of the worldwide Harlequin empire.

What does this mean for you? If you write for Harlequin, you don’t really get a choice in the matter. But Harlequin is very good about getting their books out everywhere. As for authors with other publishers, is it advantageous to retain Commonwealth rights or to grant them to your publisher? It depends.

In general, you would earn the most in a rights sale if your agent retained the rights for you and sold them herself overseas because no other middlemen are involved. However, her ability to make the foreign sale is dependent upon her network of contacts and the buzz surrounding your book. If she is unable to make the sale before your book is published in the US and your sales numbers are low, then you won’t get a Commonwealth sale, because no UK publisher is going to take that risk, whereas it’s entirely possible that your US publisher would have been able to make the sale ahead of time.

The usual Commonwealth sale split is 60/40, meaning the author gets 60% of the sale, the publisher, who made the sale, keeps 40%. Or if the publisher has the right to distribute their own edition in the Commonwealth countries, then you’ll earn more, but they will generally export on reduced royalty terms.

Of course, if you self-published or sold to a digital-first publisher, then this is a non-issue. Self-published authors retain their rights worldwide, and with the advent of such programs as Kindle Direct Publishing, Createspace, or Smashwords, you can distribute worldwide. As for digital-first publishers (for example, Samhain or Carina Press), you’re not making a geographically-restricted grant of English language rights, so the e-books can be sold worldwide.

Foreign translation rights — This one’s a lot of fun, and fairly self-explanatory. This is the right to translate your book into other languages. It’s an example of one of the subsidiary rights that is also a derivative works right, because whoever is granted the right to make the translation is not merely replicating your actual work, but is rather creating an entirely new work based upon your underlying copyrighted work.

The traditional way to accomplish this is to sell the translation rights to a publisher in another country. Like with the Commonwealth rights, your agent can either retain these rights to sell on her own (usually through sub-agents, so she will take a 20-25% commission as opposed to her 15% for US sales), or you can grant these rights to your publisher. In the latter instance, your publisher will sell the rights to foreign publisher and will take a portion of the sale.

Jeannie Lin writes for Harlequin, which as I discussed above has a worldwide network and publishes their titles all over the world. So far her books have been published in English and in Spanish, but may eventually be translated into other languages. Harlequin is known for spreading out the translations, so that their authors’ books are always “in print” somewhere in the world.

On the other hand, Darynda’s foreign rights agent has sold the translations rights in the following languages: Slovak, French, German, Russian, Thai, Taiwanese, Turkish, Bulgarian, Spanish, Italian, and Dutch.

Here are the Bulgarian, Slovak, Russian & German covers. Notice how different some of them are.

Advances and terms vary wildly, depending on the country. Germany is a huge market for romance novels, so you should expect a much higher advance in Germany than in, say, Turkey or Bulgaria, where $500-750 is very common. The foreign publisher will sometimes license the right to use the same cover (as was done with Darynda’s Bulgarian and Slovak editions), but often will create their own unique cover (such as with the German and Russian editions).

Likewise, sometimes the title will be a literal translation of the title in the US (as in the case of Jeannie’s Spanish edition, El Dragon y La Perla), and sometimes it will differ from the original title in a way that the marketing department believes would sound better in that language, such as Liz Talley’s French edition of Vegas Two-Step, which they titled La Magie d’Une Rencontre (The Magic of an Encounter). (If you’ve reserved rights and are selling to the foreign publisher directly, you or your agent should try to include a clause in the contract that will give you a right of consultation and refusal on the translation of the title to ensure that it accurately conveys the tone of your book, but this is not always possible.)

(US edition) (French edition)

(It’s amazing just how different these two covers are. The Superromance one looks like a Series Contemporary romance, whereas the French one looks like a Single Title romance, and possibly even Chick Lit. I’d never guess it was the same book. Not at all.)

Of course, translation rights are not only for traditionally-published authors. Self-published authors and those with digital presses have also been known to be able to sell their rights to foreign publishers. Often the author’s agent will shop the book (like she would do for her traditionally-published clients), but lately it’s not unheard of for such authors to be contacted by a publisher or agent in a foreign country to inquire about the availability of the translation rights. The Rubies’ own Cate Rowan, Cynthia Justlin, and Amanda Brice (hey, that’s me!) have all been contacted by foreign publishers in recent months.

If you receive such an email, you should research the company carefully. Publishers Marketplace reports some foreign rights deals, and forums such as Absolute Write or the Writers Cafe at Kindleboards.com can be very helpful You may be able to obtain an agent to handle the deal for you if the offered advance is enough to be attractive to the agent (ie, you’ve received an offer from a big publisher in Germany or France), but many foreign rights deals are relatively small.

Whether you handle your own deal or hire an agent or attorney, you’ll want to know about the company’s reliability and whether they pay their authors on time. Some foreign publishers in certain countries are notorious for not paying, despite going through the motions of obtaining rights by contract. (I’m not sure whether they just have cash flow issues or if they intend to breach the contract, in which case they likely obtain the translation righs legally so they can claim not be engaged in copyright infringement, but rather just a contract breach.) Your contract will likely include an arbitration or litigation clause for resolving disputes, but realistically, are you really going to file a lawsuit in Turkey?

The importance of digital rights varies by country. Despite the tidal wave of e-books in the US, UK, and Canada, outside of the countries that already have Amazon sites, print still reigns in much of the world. In fact, I’ve heard of authors who have been able negotiate the retention of their electronic rights, merely granting print publication rights to the foreign publisher in exchange for the right to use the translated digital file (and upload it themselves, presumably with Kindle Direct Publishing, PubIt, Smashwords, etc).

If you’re able to negotiate such a clause, the value of the rights you retain will only increase in the long run. You might not earn much at all from it today, but in the future when the digital revolution finally comes to that country, you’ll be set because you won’t have to share the profits with a publisher. (And even now, if you upload it to one of the existing self-publishing sites, you can reach speakers of that language who live in the countries that do have access to Kindle, Nook, Apple, Sony, etc.)

Some self-published authors indicate that they want to hire translators for their books, so that they can make their own foreign editions. Can they do this? Absolutely. Is this advisable? Again, it depends. Literary translation is a form of art, which is an entirely different skillset from being able to translate a legal document or simultaneous interpretation. The former requires a certain finesse and a great deal of wordsmithing so that not only is the book an accurate translation of the author’s work, but that it also reads well and retains the natural ebb and flow of your voice. In essence, the translator must not only be fluent in the language but also must be a talented author in her own right.

Whew…this post has gotten way too long! I’m going to have to cut it off right here and continue again next month with some of the other subsidiary rights, such as large print, book clubs, and audiobooks. See you again on March 6!

Wow, Amanda, kudos on a great presentation on these rights. You know, I never really thought that much about them because there always seemed something else to worry about…like the next book. It’s fascinating to see this whole other world of publishing, and how lucrative it can be for the author (and publisher). I’m off to let people know about this post – it’s so informative! Thanks 🙂

Oh, and I love my French cover – there’s something in her smile that makes me want to know what she’s up to. LOL.

I love your French cover, too. It’s really great…it’s just that I’d never in a million years guess it was for that book! Taken alone (in conjunction with the book itself, but not looking at the other), it actually works really well with the story, but I guess I’m just so used to the Superromance one that it threw me off when I saw it. LOL. Also, the massive change in tone of the title didn’t help.

Oh, and as a Harlequin author, you really don’t have to think about these rights, since Harl does it for you. But it’s still important to have an understanding of them.

Hey, great job, Amanda! And the covers for the various Ruby foreign editions were so much fun to see side-by-side. It’s interesting to see what other cultures (or more to the point, companies trying to sell to those cultures!) do with their covers.

Thank you, Amanda, for taking the time to present all of this wonderful information. I’m going to have to go back through and digest it a second time, but it’s so handy to have it here on the Ruby site!

What a fantastic post, Amanda!!! You have included so much info I would have killed for a couple years ago. Every new author needs to read this to understand. Fortunately, my agent handled all foreign rights sales and even obtained my foreign rights agent for me, so I just sat back and said, “Sure! I’d love to be in Russia!” LOL. But there are SO many things to consider when accepting or declining an offer. It’s a big world out there!

The possibility that unscrupulous publishers might deliberately seek translation rights (with no intention of paying) because they’d rather be charged with breach of contract than copyright infringement is rather chilling!

May we all be wary….*and* make lots of extra money on subsidiary rights!!

Well, I don’t know that they specifically choose to obtain the rights with no intention of ever paying so that they can try to claim breach of contract rather than infringement, but there are some publishers that continue to contract with authors for translation rights, despite histories of failing to pay their existing authors. So it’s very important to do your research if you ever receive an offer. Like I said, it will be much more of a hassle for you to sue in that other country, and if the amount in controversy is just a few hundred, it probably wouldn’t be worth your while anyway since you’d spend that much or more in legal fees, so they’re banking on the fact you likely won’t ever try to collect.